Question

Douglas Glass Ltd purchased wooden pallets with a purchase price of R1 000 000 and credit terms of 1/10 net 30. If the firm paid for these goods on the 9th day after the date of sale, how much was paid as full and final settlement for the goods?

Answer 1

Purchase Price of a Wooden pallets = R 1000000

Credit Terms = 1/10 net 30

1/10 Net 30 means total credit period is 30 days. If the bill iis paid within 10 days, then we can get a cah discount of 1%

Given in the Question the amount is paid on 9th day after the date of sale

That means bill is paid within 10 days , we can avail 1 % Discount

Discount amount = R1000000*1% = R10000

Calculation of Amout to be paid:

Particulars	Amount
Purchase price	R1000000
Less: Discount	R10000.
Amount to be paid	R990000

SO the R990000to be paid for full and final settlement for the purchase of the goods.

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